Alibaba Cloud will open its second data center in South Korea by the end of June, ramping up infrastructure to meet rising demand for generative AI services.

The new facility follows the company’s earlier expansions this year in Mexico and Thailand. Once operational, Alibaba Cloud’s network will span 29 regions and 88 availability zones globally.

The move underscores Alibaba Cloud’s efforts to support AI workloads and deliver more localized services across key markets. As cloud adoption accelerates in Asia and beyond, the company continues to compete with global providers like Amazon Web Services, Microsoft Azure, and Google Cloud.

The company has been doubling down on overseas markets in response to intensifying domestic competition and slowing growth at home. Its international push is aligned with Alibaba’s broader strategy to build out its cloud and AI ecosystem as a pillar of long-term growth.

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🔗 Source: Huxiu

🧠 Food for thought

1️⃣ South Korea’s strategic cloud market is experiencing hypergrowth

South Korea’s cloud computing market is projected to grow from $6.83 billion in 2025 to $19.89 billion by 2030, representing a compound annual growth rate of 23.82%1.

This expansion is partly fueled by the South Korean government’s “K-Cloud Project” and a recent allocation of KRW 121.9 billion ($91.5 million) specifically targeted at strengthening the domestic cloud sector1.

Alibaba Cloud’s second data center responds to this market momentum while aligning with South Korea’s broader digital transformation initiatives across finance, healthcare, and manufacturing sectors.

The timing is strategic as organizations increasingly migrate to cloud platforms for operational efficiency, cost reduction, and the scalability needed for next-generation applications.

For context, Alibaba isn’t alone in recognizing this opportunity. Amazon has committed KRW 7.85 trillion ($5.88 billion) to South Korean cloud infrastructure development through 20271.

2️⃣ Generative AI workloads are reshaping data center investments globally

Alibaba Cloud’s expansion explicitly cites generative AI demand as a primary driver, reflecting the substantial economic potential of this technology.

Companies implementing generative AI solutions have reported an average return of $3.70 for every dollar invested, creating strong incentives for cloud adoption2.

The generative AI market in related sectors is showing extraordinary growth trajectories. In media and entertainment alone, it’s projected to grow from $1.97 billion in 2024 to $20.7 billion by 20343.

This expansion pattern isn’t isolated to South Korea. Alibaba’s parallel investments in Mexico and Thailand demonstrate how AI-optimized infrastructure is becoming essential across emerging markets.

Cloud providers are specifically designing their newer facilities to handle the intensive computational requirements of AI workloads, which demand specialized hardware configurations and significantly higher power density than traditional cloud computing.

3️⃣ South Korea’s multi-cloud ecosystem is becoming increasingly competitive

South Korea’s enterprise market is evolving toward sophisticated multi-cloud strategies, exemplified by SK Group’s initiative to integrate its Cloud Z system with AWS, Microsoft Azure, and Google Cloud services4.

This trend creates both opportunity and challenge for Alibaba Cloud as it competes against established global providers like AWS, Microsoft, and Google Cloud, along with strong domestic players including Naver Cloud and Kakao Enterprise5.

The multi-cloud approach has gained traction among Korean enterprises seeking to reduce dependency on single providers and mitigate data loss risks, a direct response to growing security concerns4.

Alibaba’s second data center provides the redundancy and regional presence needed to position it as a viable component in these multi-cloud architectures.

SK Group’s planned migration of 80% of its legacy applications to cloud platforms illustrates the scale of enterprise cloud adoption in South Korea, creating substantial opportunities for providers that can address specific regional compliance and performance requirements4.

Recent Alibaba developments

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